Correlation Between Harvest Brand and BMO Junior

Can any of the company-specific risk be diversified away by investing in both Harvest Brand and BMO Junior at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Harvest Brand and BMO Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvest Brand Leaders and BMO Junior Gold, you can compare the effects of market volatilities on Harvest Brand and BMO Junior and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Harvest Brand with a short position of BMO Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Brand and BMO Junior.

Diversification Opportunities for Harvest Brand and BMO Junior

0.33

Correlation Coefficient

Harvest Brand  BMO Junior

Weak diversification

The 3 months correlation between Harvest and BMO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Brand Leaders and BMO Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Junior Gold and Harvest Brand is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Harvest Brand Leaders are associated (or correlated) with BMO Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Junior Gold has no effect on the direction of Harvest Brand i.e., Harvest Brand and BMO Junior go up and down completely randomly.

Pair Corralation between Harvest Brand and BMO Junior

If you would invest  6,316  in BMO Junior Gold on March 30, 2025 and sell it today you would earn a total of  6,683  from holding BMO Junior Gold or generate 105.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.2%
Values	Daily Returns

Harvest Brand Leaders  vs.  BMO Junior Gold

Harvest Brand Leaders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Brand Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Harvest Brand is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BMO Junior Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BMO Junior Gold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, BMO Junior may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Harvest Brand and BMO Junior

The main advantage of trading using opposite Harvest Brand and BMO Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Brand position performs unexpectedly, BMO Junior can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BMO Junior will offset losses from the drop in BMO Junior's long position.

The idea behind Harvest Brand Leaders and BMO Junior Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.